Olufemi Adeyemi
Federal Government of Nigeria on Monday finally emerged victorious in its legal case against Process & Industrial Developments (P&ID) Limited in a United Kingdom (UK) court.
After over five years of legal fireworks, judgement was delivered in favour of Nigeria, which has now halted the enforcement of the $11.5 billion arbitration award which was previously in favour of P&ID.
A UK judge has dismissed the $6.6billion arbitrary judgment against Nigeria of which interests have ballooned to $11.5 billion, won by briefcase company Process & Industry Development (P&ID) Ltd, over a failed 2010 deal to develop a gas processing plant.
Judge Robin Knowles of the Business and Property Court in
London court which sat remotely and behind closed doors, ruled that the award
were obtained by fraud and what has happened in the case is contrary to public
policy.
Nigeria had been embroiled in a fight with Process &
Industrial Developments over a failed 2010 deal to develop a gas processing
plant over which it was inflicted a $9bn judgment which has now risen to $10bn.
P&ID claimed Nigeria violated terms of its agreement by
failing to provide gas for the power plant it wants to build for the country.
This frustrated the construction of the Gas Project agreed
to during the government of former president Umaru Yar’Adua and deprived
P&ID the potential benefits expected from 20 years’ worth of gas supplies
with “anticipated profits of $5 to $6 billion.”
The arbitral tribunal unanimously decided that the Federal
Government had repudiated the GSPA by failure to perform its obligations under
the GSPA and awarded P&ID was entitled to $6.6 billion in 2017. That fine
along with interest has now risen to $11.5billion.
Former president Goodluck Jonathan government reached an
out-of-tribunal agreement for the payment of $850 million and passed on
disbursement to the administration of President Buhari.
Buhari balked at the idea of paying the negotiated sum, set
aside the settlement agreement and challenge the enforcement of the award
before the English Commercial Court. But the London court added $2.4 billion in
interest making it $9bn.
The judge granted Nigeria’s request for a stay on any asset
seizures while its legal challenge is pending, but ordered it to pay $200
million to the court within 60 days to ensure the stay. It also must pay some
court costs to P&ID within 14 days.
The original decision on Aug. 16 converted an arbitration
award held by P&ID to a legal judgment, which would allow the British
Virgin Islands-based firm to try to seize international assets.
Nigeria then began investigating the company through the
EFCC and found evidence of two bank transfers totalling $20,000 made by
Dublin-based Industrial Consultants (International) Ltd. — part of the P&ID
group of companies — to Grace Taiga, a Nigerian government lawyer who oversaw
the award of the gas plant contract.
The payments, in 2017 and 2018, were made from an Industrial
Consultants account at Allied Irish Banks and were purportedly for “medical
costs,” Bala Sanga, the lead prosecutor, said in the interview.
Based on this new evidence, it called ‘seismic’ Nigeria
filed fraud challenges against P&1D but the company has failed to respond
to the charges.
“It is increasingly clear that this was a highly
orchestrated scam, involving a cover-up by ministers at the highest levels of
office in the previous administration,” says a spokesperson for the attorney
general.
“These officials, who were entrusted to safeguard the future
and assets of Nigeria, knowingly entered into the sham GSPA, and deliberately
failed to defend the Federation in the ensuing arbitral proceedings,” the
statement said.
The statement further said that P&ID’s lawyers have not
been able to prove that it legitimately, and lawfully, secured a 20-year
contract worth hundreds of millions of Naira.
“The company has yet to even demonstrate that they had the
credentials in the first place to carry out such a complex arrangement, nor
provide any evidence of tangible investment or land-holding.
“The award in question, which amounts to over eight times
Nigeria’s national health budget, could be used for far more important, and
genuine, public issues at the current time.
“Nigeria simply cannot afford to have our future threatened
by a sham company that is not even capable of answering to the concrete
evidence of fraud levelled against them.”
With a depleted excess crude account and low returns from
even lower crude oil prices, Nigeria does not even have the capacity to pay the
judgement debt.
Nigeria’s International assets, oil cargoes, P&ID were
supposed to be seized, if Nigeria lost the appeal.